Resolution No. 03/2018/NQ-HDTP dated May 15, 2018 of the Council of Judges of the Supreme People’s Court guiding the implementation of certain regulations in settlement of dispute over settlement of non-performing loans, collateral associated with non-performing loans at people’s court

THE COUNCIL OF JUDGES
THE SUPREME PEOPLE’S COURT 

Resolution No. 03/2018/NQ-HDTP dated May 15, 2018 of the Council of Judges of the Supreme People’s Court guiding the implementation of certain regulations in settlement of dispute over settlement of non-performing loans, collateral associated with non-performing loans at people’s court

Pursuant to Law on Organization of People’s Court dated November 24, 2014;

Pursuant to Resolution No. 42/2017/QH14 on pilot settlement of bad debts of credit institutions;

With a view to consistently implement certain regulations on settlement of dispute over settlement of non-performing loans (NPL), collateral of NPL at People’s Courts;

With the mutual consent of Chief Procurator of the Supreme People’s Procuracy and the Minister of Justice,

RESOLVES:

Article 1. Scope of adjustment

This Resolution provides guidelines for reduced procedures for settlement of dispute over obligation to transfer collateral, dispute over right to sell collateral associated with NPL of credit institutions or branches of foreign banks, bad debt purchasers/managers; certain regulations of law on the resolution of disputes over settlement of NPL, collateral associated with NPL as prescribed in Resolution No. 42/2017/QH14 on pilot settlement of bad debts of credit institutions (hereinafter referred to as Resolution No. 42/2017/QH14).

Article 2. Dispute over obligation to transfer collateral, dispute over right to sell collateral associated with NPL prescribed in Clause 1 Article 8 of Resolution No. 42/2017/QH14

1. Dispute over obligation to transfer collateral associated with NPL means a dispute over the case that the debtor or collateral holder fails to transfer the collateral to the secured party or the holder of right to sell the collateral; or transfer the collateral to them unsatisfactorily with their request.

For example: Joint-stock commercial bank A gives limited liability company B a loan of VND 5 billion. In order to secure the loan under a loan agreement, company B (debtor) takes out a mortgage from bank A (secured party) on house X under company B’s ownership. The loan is determined as NPL, bank A requests company B to transfer the house X (collateral) for further settlement, but company B refuses to transfer it. Such dispute is considered as  "a dispute over obligation to transfer collateral associated with NPL".

2. Dispute over right to sell collateral associated with NPL means a dispute over determining holder of right to sell collateral associated with NPL.

For example: Joint-stock commercial bank A gives limited liability company B a loan of VND 5 billion. In order to secure a loan under a loan agreement, company B (debtor) takes out a mortgage from bank A (secured party) on the house X under company B’s ownership. The loan is determined as NPL, bank A requests company B to transfer the house X (collateral) for further settlement, but company B refuses to transfer it with the reason that it has a right to transfer the house X to another party for settlement of NPL. Such dispute is considered as  “a dispute over right to sell collateral associated with NPL".

Article 3. Dispute over settlement of NPL, collateral associated with NPL being settled under reduced procedures

1. A court shall apply reduced procedures to a dispute over obligation to transfer collateral or dispute over right to sell collateral associated with NPL if it meets conditions as prescribed in Clause 1 Article 8 of Resolution No. 42/2017/QH14 and guidelines hereof.

2. During settling a marriage and family case, before the court considers whether to bring it to first-instance trial, if an involved party requests the court to settle the dispute over obligation to transfer collateral or the dispute over right to sell collateral associated with NPL prescribed in Clause 1 Article 8 of Resolution No. 42/2017/QH14 in which the collateral is the marital property (jointly owned by husband and wife), the court may separate such a request to be heard in another case under reduced procedures.

For example: People’s Court of HP city accepts to consider a divorce case between Mr. A and Mrs. B. The joint-stock commercial bank X is considered as person with relevant interests and obligations. During preparation for trial, bank X requests the court in writing to settle the dispute over obligation to transfer collateral being land use right and right to ownership of the house on land, which is considered as their marital property. Furthermore, bank X requests the court to separate such a request to be heard in another case under reduced procedures. In this circumstance, if documentation and evidence justifying the dispute over obligation to transfer collateral between bank X and Mr. A and Mrs. provided by bank X meet conditions prescribed in Clause 1 Article 8 of Resolution No. 42/2017/QH14 and guidelines in this Resolution, the court shall separate the bank X request to another case under reduced procedures.

3. The court shall then apply regulations of the Civil Procedure Code in terms of civil lawsuit settlement under reduced procedures, its guiding documents and guidelines in this Resolution to settle dispute prescribed in Clause 1, Clause 2 hereof.

Article 4. Lawsuit petition, submission and acceptance of lawsuit petition in terms of settlement of NPL, collateral of NPL under reduced procedures

1. Form and content of a lawsuit petition are regulated in Clauses 1, 2, 3 and 4 Article 189 of the Civil Procedure Code, Form No. 23-DS issued together with Resolution No. 01/2017/NQ-HDTP dated January 13, 2017 of the Judges' Council of the Supreme People’s Court promulgating certain forms in civil procedures and guidelines in Article 6 hereof.

2. Documents enclosed with a lawsuit petition:

a) Credit contract;

b) Documentation and evidence justifying that the loan under dispute is determined as a NPL as prescribed in Article 4 of Resolution No. 42/2017/QH14;

c) Security agreement or document and evidence justifying the registration of secured transaction or security interest;

d) Items of evidence for place of residence and place of work of defendant, person with relevant interests and obligations being individuals, or head office of defendant, person with relevant interests and obligations being organizations;

dd) If an involved party resides in a foreign country, one of the following items of evidence is also required: